"You can shear a sheep many times, but you can only skin it once."
Hal Wing's father was famous for saying stuff like that. He'd say, "No matter how smart you are, you'll never be smart enough to be a good liar." Or "You'll never get rich carrying a dinner pail and punching a time clock." And "Control your money, don't let your money control you."Hal took most of his father's advice and filed it in his mind under "Useful Stuff To Know Someday." He was sure that someday he'd need that counsel. Hopefully, by then he'd understand it.
But he understood sheep well enough to know that when you shear sheep, the sheep are better off because they're cooler and cleaner, and you are better off because you have wool to sell or to make into clothes. But when you skin sheep . . . well, only one side of that deal is better off, and it's definitely not the sheep.
Years later, Hal was running a successful business -- Wing Enterprises of Springville. Through the years, Hal cultivated a special talent for negotiation (a talent that has come in handy recently while Hal has been serving as mayor of Springville). Early in his career, he found that he could usually get just about anything he wanted during a negotiating session. But something told him that he shouldn't cut too deep or negotiate too good of a deal for himself. So he always left a little bit on the table so nobody felt like they got . . . skinned.
On one occasion, one of his purchasing agents came into the office boasting about a price he had negotiated on some plastic parts. Evidently, the person with whom he was dealing made a mistake, and the result was that Wing Enterprises would be purchasing large parts for the cost of smaller ones. It was great for Hal's business -- but not for Hal.
"I felt uncomfortable about the deal," he said. "I thought about Dad's lesson on sheep. Suddenly, its meaning became clear. We had a deal, but it wasn't a good deal. We could skin this supplier, but what would we lose in the process? Fairness is a two-way street. If it isn't a good deal for both parties, it isn't a good deal -- even if you're the one getting the long end of the stick."
So Hal drove to the supplier's office and asked to see the owner. "Sir," he said after introducing himself, "I want to talk to you about the price we're paying for plastic parts."
"Stop right there," the owner said. "We've done a lot of business with your company, so I'm going to honor our commitment. But we won't be doing business with you again."
"You don't understand," Hal said. "I'm not asking for a lower price, I want to raise it."
The owner was stunned. He asked Hal to repeat his intention.
"I'm asking you to raise your price," Hal said. "Our people have agreed upon a price that isn't fair. You charge me what's fair. I'll live with that."
As you might expect, Hal's company still got a great deal on plastic parts. But more importantly, they maintained a significant relationship that has been beneficial to their long-term success simply by being willing to settle for shearing the sheep, not skinning it.
Hal Wing and Joseph Walker are both associated with the BYU Center for Entrepreneurship. They can be contacted via e-mail at cfe@byu.edu.